Charismatic Capital, a Singapore-headquartered alternative investment manager, is planning to launch its debut fund focusing on loans to listed companies.
The Charismatic Debt Equity Fund, a three-year closed-ended alternative investment fund, has a target size of $250 million and is looking for a target IRR of 12-20 percent per annum.
The fund will lend to both individual and corporate shareholders of listed companies in Asia and Europe. The size of the loans will be typically between $5 million to $10 million, secured by the borrowers’ listed shares and personal guarantees. Most of the loans will be used as working capital for the companies to fund expansion and new projects.
“Due to regulatory solvency restrictions such as Basel III, banks are forced to phase out single stock financing solutions. However, an increasing number of listed companies require access to short-term credit facilities to finance their expansion,” the company said in a statement.
At the same time, many major shareholders of the companies are reluctant to transfer the ownership of shares due to the desire to retain voting rights and dividend pay outs.
“And in the bond market, there are just too many choices. For a company to be outstanding, it needs to have a huge coupon, and I don’t think a lot of these companies can afford that,” said Ching Ching Lam, managing director and chief investment officer of the fund.
The fund is looking to have three to four rounds of fundraising with a target $50 million first close by the end of this year. It is looking to raise capital from mainly family offices, high net worth individuals and some institutional capital in Asia and Europe.
Before starting her own fund, Lam was in the banking industry for over 25 years, half of which was in private banking with several European and Swiss banks such as Credit Industriel et Commercial, EFG and UBS. She advised high net worth clients on equity funds and managed total AUM of over $1 billion.